SC Supreme Court To Debate Medical Facility Expansion Regulations

South Carolina's highest court is gearing up for a debate over whether the state's health agency can end a program that regulates the building or expansion of medical facilities.

On Thursday, the state Supreme Court is scheduled to hear arguments over the Certificate of Need program, an approvals process administered by the Department of Health and Environmental Control and required under state law for any medical facilities seeking to build or expand.

The program has been on hold since June, when Gov. Nikki Haley vetoed the $1.7 million needed to run it, saying she thinks it's an impediment to the free market and isn't needed. The House sustained Haley's veto after Ways and Means Chairman Brian White took the floor and said the veto was just about the money, not whether the program should continue.

Since that vote, some House Republicans have said they didn't intend to nix the program entirely, pointing out last summer that an executive decision to discontinue the program "may be contrary to law but is certainly contrary to the will and intent of the House of Representatives."

Three dozen states have similar programs, according to the National Conference of State Legislatures.

State law still requires medical facilities to acquire a Certificate of Need from DHEC before building, expanding, offering a new service or buying medical equipment costing more than $600,000. When Haley vetoed the funding, about three dozen projects worth about $100 million were being reviewed by DHEC.

Groups including the South Carolina Hospital Association sued over the issue, saying the state law requiring the review is still on the books and can't be suspended just because DHEC didn't set aside money to pay for it. Supporters also have argued that the Certificate of Need program is needed to keep costly medical services or hospital beds from going unused and that it ensures that rural communities keep access to health care.

"That the CON Act has not been repealed demonstrates the General Assembly's intent that it should remain the law of this State," the hospitals said in their lawsuit.

DHEC asked the Supreme Court to decide whether the agency could suspend the program, and justices agreed in September that they would hear the case. A Senate resolution to compel DHEC to otherwise fund the program is pending in a medical affairs committee.

Haley said that her veto, upheld by the South Carolina House, meant the program is finished, and that companies shouldn't have to get approval before they make business decisions. In an amicus brief, attorneys for the Republican governor said that the case is not merely a dispute between the executive and legislative branches and that it simply means the program hasn't been funded for this year.

"The Court should disregard the rhetoric that has surrounded this case and apply the law as it has always been understood: When the General Assembly does not allocate funding to an agency to perform a specific statutory task, that statutory responsibility is suspended for the upcoming fiscal year," Haley's attorneys wrote. "The simple fact is that once the entire legislative process had run its constitutional course, the Legislature passed a law that did not appropriate any funds to DHEC to operate the Certificate of Need program for the current fiscal year."

Haley has long opposed the Certificate of Need program. Before she became governor, she worked as a fundraiser for Lexington Medical Center, which spent nearly a decade fighting with DHEC over whether it could do open-heart surgery before reaching a compromise with another Columbia-area hospital.